Monday, 11 October 2010

The curious case of The Spirit Level

Myths rarely turn into conventional wisdom overnight. Usually they evolve gradually, exaggerated and embellished in the retelling. But in the case of The Spirit Level, a work of political science published last year, the transition from legend to gospel has been made with dizzying speed.

As its subtitle suggests, The Spirit Level: Why more equal societies almost always do better argues that the success of entire nations depends not on their absolute wealth but on the size of the gap between the highest and lowest earners. The ‘less equal’ nations suffer most severely from health and social problems, while the ‘more equal’ countries—particularly the Nordic states—are happier, healthier, more trusting, slimmer, more charitable and more socially cohesive.

The book’s authors—social epidemiologists Richard Wilkinson and Kate Pickett—insist that this phenomenon is not due to poverty, but is the result of the ‘psychosocial’ stress of living in an “unfair” country. Inequality, they say, acts like a “pollutant spread throughout society” with rich and poor equally susceptible to its toxic effects. The lesson is clear—if you want to mend the broken society, reject free market capitalism and adopt the Scandinavian model.

What raises The Spirit Level above the average left-wing polemic is what The Guardian described as its “inarguable battery of evidence”. This takes the form of a series of scatter graphs which, while crude, are consistent in their message: nearly all undesirable outcomes are more common in less equal countries. So neatly does this “battery of evidence” appeal to those who thought Gordon Brown was too right-wing, that it has been readily embraced by many on the left, including both Milliband brothers. A hotly debated political issue has, it seems, now been answered by science; an ethical question that has exercised the greatest minds for centuries has been answered with hard data.

If only things were so simple. In reality, The Spirit Level presents the world as its authors would like to see it, with inconvenient facts ignored and whole nations erased from the narrative. While claiming to study all rich market economies, countries such as Czech Republic, South Korea, Slovenia and Hong Kong never feature. If they had, the reader would see that the latter performs very well under almost every criteria despite extreme inequality (as does Singapore), while the Czech Republic and Slovenia do much less well despite having a very narrow gap between rich and poor.

If the sample group seems oddly selective, so too are the criteria of what makes a country “do better”. Wilkinson and Pickett focus on Scandinavia’s relatively low rate of illegal drug use without mentioning its high rate of alcoholism. They devote a chapter to the higher rate of imprisonment in less equal countries without discussing the more pertinent—and hardly coincidental—fact that these countries also have less crime. They confidently assert that people in egalitarian societies are more philanthropic, have stronger family relationships and are more involved in the local community. Had they sought empirical evidence for any of this, they would have found that it is actually the people in less equal countries who give more to charity, have fewer divorces and are most likely to be a member of a local club or association.

And so it goes on. Remarkably few of The Spirit Level’s claims stand up to scrutiny. If the book demonstrates anything, it is how easily statistics can be transformed into the proverbial ‘damned lies’. Nonetheless, it is a book that should not be ignored. Not only has it built up a large and avid readership, but it represents a milestone for those who view the narrowing the wealth gap as more important than creating wealth. While the traditional aim of the left was to alleviate poverty by making the poor richer, inequality can be alleviated by narrowing inequality in ways that need not make anyone richer.

Indeed, Wilkinson and Pickett seem indifferent to how inequality is reduced and explicitly state that economic growth is not the answer. By their rationale, society would improve if the poor got 5% poorer so long as the rich got 20% poorer. Rounding up Britain’s millionaires and sailing them to the Antarctic would not only make life better for the poor but, still less improbably, would make life better for everyone. But without a compelling reason to believe such a reduction will materially benefit the working class, the authors leave themselves open to accusations of trading in the politics of envy.

Herein lies the problem with focusing on relative income instead of absolute income. There are things we can do to make the poor richer which might also reduce inequality, and vice versa, but the two objectives are not always compatible. The government’s recent decision to raise the tax threshold to £10,000, for example, should make the poor richer, but if the rich find ways to get even richer in the mean time, will the resulting inequality make things worse? It is not obvious how or why, but the logic of The Spirit Level says it must.

In the end, the case for reducing inequality remains a moral and political question. It is not one that be answered by science. The Spirit Level represents an ingenuous attempt to bridge the gap between faith and reason but, like all grand unifying theories, it can be filed under ‘too good to be true’.

About Me

Writer and researcher at the Institute of Economic Affairs. Blogging in a personal capacity.
Author of Selfishness, Greed and Capitalism (2015), The Art of Suppression (2011), The Spirit Level Delusion (2010) and Velvet Glove, Iron Fist (2009).

"Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience."